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Frankly Inc. Announces Non-Brokered Private Placement Of Units Comprised Of Convertible Debentures And Warrants

Proceeds to be loaned by Frankly to Torque Esports or a subsidiary thereof to support proposed business combination TORONTO, Jan.

Proceeds to be loaned by Frankly to Torque Esports or a subsidiary thereof to support proposed business combination

TORONTO, Jan. 28, 2020 /PRNewswire/ -- Frankly Inc. ("Frankly")(TSX-V: TLK) (OTCQX: FRNKF) today announced that it intends to conduct a non-brokered private placement offering (the " Offering") of units (" Units"), with each Unit comprised of $1,000 aggregate principal amount of unsecured subordinated convertible debentures (collectively, the " Debentures") and one‑half of one common share purchase warrant (collectively, the " Warrants"), for aggregate gross proceeds to Frankly of a minimum of $2.5 million.  Frankly intends to use the proceeds from the Offering (net of any professional service fees and finder's fees, if any) to provide a loan to Torque Esports Corp. (" Torque") or a subsidiary thereof (the " Torque Loan"). Frankly may pay a finder's fee to arm's length finders in connection with the Offering of no more than 6% of the aggregate subscription amount raised through subscribers introduced to Frankly by such finder(s), provided that no finder's fees will be paid in respect of any subscriptions made by existing shareholders of Frankly, or to any insider of Frankly, or that is otherwise prohibited by law.

The Offering and Torque Loan are intended to support the efforts of Frankly and Torque as the parties work to enter into definitive documentation in respect of the proposed business combination among Torque, Frankly and WinView, Inc., as previously announced on November 26, 2019 (the " Transaction").  The anticipated terms of the Offering (as described in further detail below) are designed to minimize dilution to shareholders of Frankly in the event that the Transaction is terminated or otherwise not consummated by the Maturity Date (as defined below).

It is expected that the Debentures will bear interest at a rate of 4% per annum, and will mature on April 30, 2020 (unless otherwise extended, the " Maturity Date").  The Debentures are expected to be automatically convertible into common shares of Frankly (" Frankly Shares") immediately prior to the completion of the Transaction, at a conversion price of $0.67 per Frankly Share. It is expected that, in the event that the parties determine to terminate or otherwise not pursue the Transaction, or if the Transaction is not completed by the Maturity Date, the Debentures will be redeemable by Frankly in consideration of a redemption payment, payable in-kind, comprised of a pro rata assignment of Frankly's interest in the Torque Loan to holders of Debentures, or such other arrangement satisfactory to Frankly and investors that results in the extinguishment or repayment of the Debentures in exchange for the transfer of Frankly's interest in the Torque Loan to the holders of Debentures. The Debentures will otherwise provide for customary events of default and other terms and conditions as are typical for investments of this nature.

The Warrants will expire upon the earlier to occur of: (i) the date that the parties determine to terminate or otherwise not pursue the Transaction; and (ii) two years from the date of issue, and will be exercisable at a price of $0.90 per Frankly Share.  The Warrants will contain an acceleration provision that will entitle Frankly (or its successor) to accelerate the expiry of Warrants if the volume-weighted average trading price of the Frankly Shares (or shares of the successor entity) exceeds $1.35 for a period of five consecutive trading days.

The Offering and the terms thereof are subject to the approval of the TSX Venture Exchange, as well as the entering into of satisfactory documentation in respect of the Torque Loan.  Securities issued or issuable in connection with the Offering are expected to be subject to statutory and, if required, exchange-mandated four month hold periods.

The Torque Loan is expected to be unsecured and will bear interest at a rate of 4% per annum.  The Torque Loan will include customary events of default, covenants, representations and warranties and other terms and conditions as are customary for transactions of this nature. The obligations of the borrower entity under the Torque Loan will be guaranteed by Torque.

Closing of a first tranche of the Offering is expected to occur on or about February 4, 2020.

The securities of Frankly have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S Securities Act"), and may not be offered, sold or resold within the United States, or to or for the account or benefit of any U.S. person, unless the securities are registered under the U.S. Securities Act, or an exemption from the registration requirements of the U.S. Securities Act is applicable. This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company, nor shall there be any sale of securities of the Company, in the United States in which such offer, solicitation or sale would be unlawful.

About Frankly Media

Frankly Media provides a complete suite of solutions that give publishers a unified workflow for the creation, management, publishing and monetization of digital content to any device, while maximizing audience value and revenue.

Frankly's products include a groundbreaking online video platform for Live, VOD and Live-to-VOD workflows, a full-featured CMS with rich storytelling capabilities, as well as native apps for iOS, Android, Apple TV, Fire TV and Roku.

Frankly also provides comprehensive advertising products and services, including direct sales and programmatic ad support. With the release of its server-side ad insertion (SSAI) platform, the company has been positioned to help video producers take full advantage of the growing market in addressable advertising. The company is headquartered in New York with offices in Atlanta. Frankly Media is publicly traded under ticker TLK on Canada's TSX Venture Exchange. For more information, visit

Cautionary Statement on Forward-Looking Information

This news release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Frankly to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements include, but are not limited to, statements relating to our expectations with respect to: the Offering, the Torque Loan, and their respective terms and conditions, and the expected timing to complete the Offering and the Torque Loan. Often, but not always, forward‑looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. In respect of the forward-looking statements and information made in this news release, Frankly has provided such statements and information in reliance on certain assumptions that they believe are reasonable at this time, including assumptions based on the progress and expected timing to enter into definitive documentation in respect of the Transaction, expectations concerning the timing of completing the Offering and Torque Loan and obtaining required approvals. There can be no assurance that any of the Transaction, the Offering or the Torque Loan will occur, or that any of those events will occur on the terms and conditions contemplated in this news release. Any of the Transaction, or the Offering and Torque Loan could be modified, restructured or terminated. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release.

Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks, including but not limited to the following: the risk that the parties are unable or unwilling to enter into a definitive agreement with respect to the Transaction for any reason and the risk that the Offering and/or the Torque Loan may not be completed for any reason. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of the parties are included in reports on file with applicable securities regulatory authorities.

The forward-looking statements contained in this news release are made as of the date of this release and, accordingly, are subject to change after such date. Frankly does not assume any obligation to update or revise any forward-looking statements, whether written or oral, that may be made from time to time by Frankly or on its behalf, except as required by applicable law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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SOURCE Frankly Media